Many of you received the May 31 Pension Fund Notes from the AFM-EPF trustees. Their statements are misleading and inaccurate. Here is MPS’ point by point response:

Trustee statement:“We’re pleased that our investment strategy is allowing the Fund to continue for another year without falling into critical and declining status.”

What they are not telling you:

• A federal judge has recently criticized our trustees’ investment strategy as “extraordinarily risky.” Documents have recently emerged indicating that counsel for the AFM-EPF thought the investment returns were “ugly” and that "there would be a riot*" if plan participants were told the true facts about the trustees’ investment performance. Read the full transcript here.

• In the same lawsuit, the trustees have recently admitted that in five of the last eight years, their investment returns were sub-par, underperforming their own benchmarks.

• The trustees had AFM-EPF fund consultant Meketa prepare a comparison of 23 multiemployer pension plans investment performance including the AFM-EPF. The plans are ranked by the percentile each plan falls into with 99th being the worst and 1st being the best. The AFM-EPF’s 10-year investment performance is 99th percentile, the worst performance in the peer group. The 5-year performance is 91st percentile and the 3-year performance is 87th percentile. Read our previous article here.

Trustee statement:“When compared apples to apples, the Fund’s administrative expenses fall in the mid-range when compared to other entertainment industry funds and they are on the low-end when measured per employer, per collective bargaining agreement and per participant.”

What they are not telling you:

• Expenses are 39.6% higher than peer pension funds in the entertainment industry and twice those of our sister pension fund in Canada.

• In 2017, expenses increased 4.15% year over year. Our trustees are wasting away our valuable pension dollars on unnecessary consultants like Hart Associates, which is a high-priced Washington DC polling and strategic communications firm. The Executive Director of our pension plan is making $430,000 per year which is double what other executive directors at similarly situated funds make. Read our previous article here.

• According to documents that come directly from the trustees’ files, they believe that expenses will be increasing at the rate of 2.25% per year over the next 20 years. They project no decreases whatsoever. See trustee documents here.

Trustee statement:“From 2010 to 2018 annual employer contributions increased by nearly 4% per year on average.”

What they are not telling you:

• According to the official filings that the AFM-EPF makes with the Department of Labor, total employer contributions in 2009 were $56.87 million and the total contributions in 2016 (the last year for which we have the official filings), was $67.89 million. That is a change of 19.36% which over seven years represents an annual increase of 2.42%.

• According to the trustees’ own documents, they believe that employer contributions will increase at only 2.5% per year over the next 20 years. That is the assumption they have built into all their projections. See trustee documents here.

• Since 2009, the only significant increase in employer contributions has been the 9% increase that took place beginning 2011 and was spread over several years. Those increases were mandated under the law. Under federal labor law, once a plan goes into critical status, employer contributions are automatically raised by 9%. The AFM-EPF went into critical status in 2011 and the statutory increases began then. Ray Hair and Tino Gagliardi regularly credit themselves for the government-mandated increase in employer contributions but the reality is they had nothing to do with negotiating the increase.

Trustee statement:“The trustees continue to explore every option to improve the health of the fund.”

What they are not telling you:

• The only option the trustees are exploring is to prepare for cuts. The trustees have already made extensive preparations for cuts to our pensions. According to the trustees’ own documents they have even had a series of discussions with the staff of the U.S. Treasury about the best way to frame their cut application.

The trustees have decided instead of spending their time reforming and safeguarding our pension fund, they would rather engage in a counterproductive back and forth with the not for profit group MPS. The trustees' defensive messages that utilize misleading numbers are just another attempt at misdirecting attention from the mismanagement that’s gone unaddressed at the fund for years. One area where the trustees have been silent over the last two months is the call for board reform and the immediate appointment of new trustees who are actuarial and investment experts that can create real solutions to improve the health of the fund. It is time for our trustees to finally act in the best interest of the very musicians across the country whose retirement benefits are on the verge of being cut.

* This quote has been corrected from an earlier draft that was sent in error that stated there would be a "riot in the streets." This quote comes from page 27 of the transcript and you can read it here.